Similarly, current account deficit (CAD) has reached 5 per cent of Gross Domestic Product (GDP) in Turkey against 2 per cent in India. Current Account Deficit is the excess of imports over exports. High CAD is bad for the economy as it indicates an outflow of money from the country leaving behind no surplus.

Salil Datar, CEO and executive director, Essel Finance VKC Forex, said, “The current drop in Rupee is mainly due to the crisis in Turkey. The dollar index has strengthened beyond 96 levels reflecting its safe-haven status due to a possible domino effect of the Turkey crisis on the other financial institutions.”

The rupee, however, recovered from the all-time low of 69.91 and strengthened by 23 paise to 69.68 against the US dollar in opening trade at the interbank foreign exchange market today.

On Monday, the rupee had depreciated by 1.57 per cent, to a record low of 69.91 against the US currency amid fears that Turkish currency turmoil can unfold into the global crisis.